<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________.
Commission file number: 33-14065-D
DRY DAIRY INTERNATIONAL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
UTAH 87-0476117
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 FOURTH ST, SARASOTA, FL 34236
- --------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
(941) 362-0470
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- -----------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), Yes [ ] No [X ] and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of common
stock, was 45,995,688 shares of common stock, par value $0.001, as of
March 31, 1999.
<PAGE>
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of March 31, 1999, and the
related audited balance sheet of the Company as of December 31, 1998, and the
related unaudited statements of operations, and cash flows for the three month
period ended March 31, 1998 and 1999, and the unaudited statement of
stockholders' equity for the period from December 31,1997 through March 31,
1999, are attached hereto and incorporated herein by this reference.
Operating results for the three months ended March 31, 1999, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1999.
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DRY DAIRY INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, DECEMBER 31,
1999 1998
(Unaudited) (Audited)
------------ ------------
ASSETS
Current Assets:
Cash $ 62 $ 161
---------- ---------
Total current assets 62 161
---------- ---------
Total Assets $ 62 $ 161
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Reserve for discontinued operations (Note 6)$ 594,336 $ 594,336
Accounts payable 14,678 0
Notes payable - shareholder (Note 7) 50,000 50,000
Accrued interest payable 3,667 2,667
Payable - related party 21,000 0
Line of credit - related party (Note 5) 647,193 634,503
--------- ---------
Total current liabilities 1,323,962 1,281,506
--------- ---------
Total Liabilities 1,323,962 1,281,506
--------- ---------
Stockholders' Equity:
Stock authorized 50,000,000 shares at
$0.001 par value; 45,995,688 shares
issued and outstanding. 45,996 45,996
Additional paid-in capital 2,611,897 2,611,897
Accumulated deficit prior to
development stage (2,591,722) (2,591,722)
Accumulated deficit from the inception
Of development stage (1,390,071) (1,347,516)
--------- ---------
Total Stockholders' Equity (Deficit) (1,323,900) (1,281,345)
--------- ---------
Total Liabilities and
Stockholders' Equity $ 62 $ 161
========== =========
A accompanying footnotes are an integral part of these consolidated financial
statements.
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DRY DAIRY INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
FROM
INCEPTION
OF THE
DEVELOPMENT
STAGE ON
JANUARY 1,
FOR THE THREE MONTHS 1998
ENDED MARCH 31, THROUGH
1999 1998 MARCH 31,
(Unaudited) (Unaudited) 1999
----------- ----------- ------------
Revenues $ - $ - $ -
----------- ----------- -----------
Expenses 42,555 - 42,555
----------- ----------- -----------
Loss From Operations Before Loss
From Discontinued Operations 42,555 - 42,555
----------- ----------- -----------
Loss From Discontinued Operations - 130,084 1,347,516
----------- ----------- -----------
Net Income (Loss) $ (42,555) $ (130,084) (1,390,071)
=========== =========== ===========
Net gain (loss) per share $ (0.00) $ (0.03)
=========== ===========
Weighted average number of shares
outstanding. 45,995,688 43,695,688
=========== ===========
The accompanying footnotes are an integral part of these consolidated
financial statements.
<PAGE>
<PAGE> 5
DRY DAIRY INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Par Value Capital Deficit
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 35,295,688 $35,296 $1,707,797 $(1,536,314)
========== ======= ========== ===========
Common stock issued for
cash at $0.075 per
share 3,800,000 3,800 281,200 -
Common stock issued for
equipment at $0.010 per
share 2,800,000 2,800 277,200 -
Common stock issued for
cash at $0.10 per share 1,000,000 1,000 99,000 -
Common stock issued for
cash at $0.050 per share 1,800,000 1,800 89,000 -
Common stock issued for
debt at $0.10 per share 500,000 500 50,500 -
Reverse canceled shares 800,000 800 107,200 -
Net loss for the year
ended December 31, 1997 - - - (1,055,408)
---------- -------- ---------- -----------
Balance,
December 31, 1997 45,995,688 $ 45,996 $2,611,897 $(2,591,722)
========== ======== ========== ===========
Net loss for the year
ended December 31, 1998 - - - (1,347,516)
---------- -------- ---------- -----------
Balance,
December 31, 1998 45,995,688 $ 45,996 $2,611,897 $(3,939,238)
========== ======== ========== ===========
Net loss for the period
ended March 31, 1999
(Unaudited) - - - (42,555)
---------- -------- ---------- -----------
Balance, March 31, 1999 45,995,688 $ 45,996 $2,611,897 $(3,981,793)
========== ======== ========== ===========
</TABLE>
The accompanying footnotes are an integral part of these consolidated
financial statements.
<PAGE>
<PAGE> 6
DRY DAIRY INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FROM
INCEPTION
OF THE
DEVELOPMENT
STAGE ON
JANUARY 1,
FOR THE THREE MONTHS 1998
ENDED MARCH 31, THROUGH
1999 1998 MARCH 31,
(Unaudited) (Unaudited) 1999
----------- ----------- ------------
Operating Activities:
Net gain (loss) $( 42,555) $ (130,084) $(1,390,071)
Adjustments to reconcile net gain
(loss) to net cash provided
by operating activities:
Common Stock issued for services - - -
Loss on discontinued operations - - 851,596
Changes in operating assets and
liabilities:
Depreciation - 21,000 -
Increase (decrease) in accounts
receivable - (41,122) -
(Increase) decrease in inventory - 14,428 -
(Increase) decrease in other
current assets - (10,444) -
Increase (decrease) in cash
overdraft
Increase (decrease) in accounts
payable and other current payables 28,766 47,335 202,421
Increase (decrease) in accrued
taxes - 7,883 -
Increase (decrease) in accrued
interest 1,000 - 1,000
---------- ---------- ----------
Net cash used by operating activities (12,789) (91,677) (355,054)
---------- ---------- ----------
Investing Activities:
Purchase of property and equipment - (3,397) -
---------- ---------- ----------
Net cash used by investing activities - (3,397) -
---------- ---------- ----------
Financing Activities:
Proceeds from notes and
line of credit payable related 12,690 96,000 343,109
Repayment of notes payable - (1,526) (7,993)
Issuance of common stock for cash - - -
---------- --------- ----------
Net cash provided by financing
activities 12,690 95,074 335,116
---------- --------- ----------
(Decrease) Increase in Cash (99) - 62
Cash at beginning of period 161 - 0
---------- --------- ----------
Cash at end of period $ 62 $ - $ 62
========== ========= ==========
Supplemental cash flows information:
Cash paid for:
Interest $ 13,690 $ 10,414
Taxes $ - $ -
<PAGE> 7
DRY DAIRY INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999 AND DECEMBER 31, 1998
NOTE 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at March 31, 1999 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's December 31,
1998 audited consolidated financial statements. The results of operations for
the periods ended March 31, 1999 and 1998 are not necessarily indicative of
the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred cumulative operating losses through March
31, 1999, and has a working capital deficit at March 31, 1999. Revenues have
not been sufficient to cover it's operating costs and to allow it to continue
as a going concern. The potential proceeds from the sale of common stock,
other contemplated debt and equity financing, and increases in operating
revenues from new developments would enable the Company to continue as a going
concern. There can be no assurance that the Company can or will be able to
complete any debt or equity financing. If these efforts are not successful,
management is committed to meeting the operational cash flow needs of the
Company.
<PAGE>
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company began the year reclassified as a development stage company having
discontinued operations in all three of it's subsidiaries during fiscal year
1998. Due to the lack of assets and available funds, the Company's 1998 fiscal
year audited financial statements contain a "going concern" disclosure which
places into question the Company's ability to continue without substantial
increases in revenue or financing. Currently, the Company is in search of
candidates for merger which would bring operations to the Company.
On October 20, 1995, the Company completed the sale of a controlling interest
in the Company to Mr. Philip R. Lacerte of Dallas, Texas. The terms of the
purchase agreement provided that the Company issue to Mr. Lacerte, 13,827,500
shares of the Company s restricted common stock, at the time constituting
50.5% of the Company s total issued and outstanding shares, in exchange for a
cash payment of $110,000 and the extension of a line of credit for up to
$550,000, to meet the Company s then operational needs. Interest on the line
of credit is eight percent (8%) per annum.
During the fiscal year ended December 31, 1998, the line of credit was
increased to $650,000 and $634,503 of credit and interest was extended under
the terms of the line of credit agreement. This balance was due and owing at
December 31, 1998. During the quarter ended March 31, 1999, the line of credit
balance due increased to $647,193.
Liquidity and Capital Resources
At March 31, 1999, the Company had total current assets of $62 and total
current liabilities of $1,323,962, resulting in a working capital deficit of
$(1,323,900), as opposed to current assets of $262,564 and total current
liabilities of $932,936 at March 31, 1998, resulting in a working capital
deficit of $(670,372).
During the first quarter ended March 31,1999, the Company issued no shares of
its common stock. During the fiscal year ended December 31, 1998, the Company
issued no shares of it's common stock.
Management believes that new acquisitions of companies with current operations
can be successfully financed by third parties. The Company will continue to
seek other sources of financing. Due to the Company's financial condition it
does not anticipate receiving substantial, if any, debt financing.
Results of Operations
The Company has experienced a loss from discontinued operations of $1,390,071
from inception of January 1, 1998 until March 31, 1999. At December 31, 1998,
the Company had an accumulated deficit of $2,591,722 prior to it's
reclassification as a development stage company, in large part attributed to
bad investments prior to the acquisitions of Dry Dairy and Lombardo's
Pastaria, plus the operating losses incurred by the Company during fiscal year
1995 and 1996. The Company incurred an accumulated deficit of $1,347,516
during its re-classified development stage operations of 1998.
<PAGE> 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company has filed an arbitration suit in accordance with the terms of it's
distribution agreement with A&C Bakeries, Inc. The Company is seeking to have
it's $250,000 up-front purchase price returned as well as other start-up costs
and damages from the termination of the agreement without cause by A&C. In
addition, the Company has successfully filed for and been awarded an
injunction blocking the withdrawal of funds by A&C Bakeries against a $250,000
letter of credit posted by the Company and guaranteed by a shareholder.
A $70,000 charge has been included in Reserve for Discontinued Operations on
the Company's balance sheet for a settlement negotiated in the case in July of
1999.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 30, 1999 the Company held a special meeting of Shareholders and
approved two amendments to it's articles of incorporation. Article 1 was
amended to authorize a name change to Dryden Industries, Inc. and Article four
was amended to authorize an increase in the number of shares authorized for
issuance from 50,000,000 to 150,000,000.
The changes to the Company's Articles of Incorporation were not submitted to
the State of Utah until the second quarter and therefore the effective date
for the amendments was June 9, 1999.
The number of issued and outstanding shares entitled to vote on these
Amendments to the Articles of Incorporation was 45,995,688 of which number
25,000,000 shares voted in favor and none opposed.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- -------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K.
None.
<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DRY DAIRY INTERNATIONAL, INC.
[Registrant]
Dated: October 26, 1999
/S/Robert L. Matzig
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 62
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 62
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 62
<CURRENT-LIABILITIES> 1,323,962
<BONDS> 0
0
0
<COMMON> 45,996
<OTHER-SE> (2,611,897)
<TOTAL-LIABILITY-AND-EQUITY> 62
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28,865
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,690
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (42,555)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (42,555)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
